Disagreement over replacement EU cash for Tees Valley

The Tees Valley has been promised more than £42m from the government’s post-Brexit “Shared Prosperity Fund” – designed to replace EU money.

But analysis from the Northern Powerhouse Partnership (NPP) has shown the £42m granted is substantially less than the £73m it would have been awarded had Britain still been in the EU.

This sparked concerns the region had been “robbed” by Stockton North Alex Cunningham MP. However, information provided by the Tees Valley Combined Authority (TVCA) purports to show spending “will remain at the level of the previous programme”.

A report from the TVCA showed the European Structural and Investment Fund (ESIF) – which included cash from the European Social Fund and the European Regional Development Fund – averaged £28m per year between 2014 and 2020. It added the new Shared Prosperity fund had “increased flexibility to meet local needs” and “fewer restrictions” than ESIF.

Tees Valley Mayor Ben Houchen said the remaining ESIF funding combined with cash from the Shared Prosperity Fund – with another small pot called the “Multiply fund” – would see the region get the same as it had before. He added: “The information is in black and white and our accounts show that we will have at least the same amount of money as we did when we were in the EU.

“Indeed, with Levelling Up funding and other grants coming into the region, Teesside, Darlington and Hartlepool will actually have more money than when we were in the EU. Some organisations still have an axe to grind over Brexit – but I won’t let their tired agenda tarnish the progress we’re making as an area.”

Read more: North East funding slashed by millions after Brexit 'catastrophic'

But Henri Murison, director of the NPP, didn’t agree with the breakdown offered up by the TVCA and the mayor. The partnership chief said: “We have the utmost respect for the metro mayor but disagree on the validity of this analysis, which is an attempt to show that the government has kept its 2019 manifesto commitment – when it hasn’t.

“The figures he cites use a double-counting method, meaning they include the last round of unspent EU funding – which has historically always been in addition to a new allocation. It’s a bit like saying that a child doesn’t get any birthday money because they haven’t spent their Christmas money yet.

Henri Murison, director of the Northern Powerhouse Partnership

“The reality is the government is providing less money than before – the Treasury’s attempt to move the goal posts won’t change that.” During its EU membership, the UK received an average of £1.5bn a year in structural funds from Brussels between 2014 and 2020.

It’s understood the replacement SPF will only be worth around £400m this year, £700m next year and will only hit the previous level of £1.5bn in 2025. The Government has argued that it only needs to “match” EU funding levels by 2024/25 because the UK will continue to receive its final allocation of EU money until then.

Read more: Government reveals details of North East levelling up projects

Mr Houchen said the region was “making great progress” with the Treasury coming to Darlington and the Teesside Freeport – something he claimed “would have been impossible had we stayed in the EU”. He added: “With the continued money coming into the area we are able to deliver on the investments we have committed to over the next three to five years.”

Freeports do exist within the EU – although in a more limited form than elsewhere in the world, as EU state aid rules generally stop EU governments from providing support to some companies over their competitors.

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